The Impact of Housing Loan/Financing on Malaysian Bank Risk Performances

Mohamad Yazid Isa*, Muhammad Arif Fadilah Ishak, Noriza Abd Aziz and Afiruddin Tapa
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Mohamad Yazid Isa*: Islamic Business School, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia
Muhammad Arif Fadilah Ishak: Islamic Business School, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia
Noriza Abd Aziz: Islamic Business School, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia
Afiruddin Tapa: School of Economic, Finance and Banking, Universiti Utara Malaysia 06010 Sintok, Kedah, Malaysia

The Journal of Social Sciences Research, 2018, 140-144 Special Issue: 6

Abstract: This study investigates the impact of housing loan/financing on bank risk performances in Malaysia. The data is collected from 12 commercial banks and 12 Islamic banks in Malaysia within the period of 2002-2016. Non-performing loan (NPL) and loan loss provision (LLP) are used as proxies for bank risk and they are regressed with housing loan/financing, expenses, total loan, income, gross domestic product and inflation. The results from Random and Fixed Effect models show that housing loan/financing has significant impact on the NPL and the LLP of commercial banks and Islamic banks. The results also show that even though commercial banks seem to dominate housing loan/financing market, but Islamic banks are capable to compete with commercial bank in this specific type of financing.

Keywords: Commercial bank; Islamic bank; House financing; Risk. (search for similar items in EconPapers)
Date: 2018
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